As The Cookie Crumbles

There has been a tremendous amount of hand-wringing in the press about a spate of new surveys that indicate that a growing number of consumers are routinely and aggressively deleting cookies from their computers. One study, for example, claims that 27% of consumers clear cookies from their machines on a weekly basis.

Cookies are small files that your Web server software can place on the hard drive of every visitor to your Web site. Originally, cookies were designed to provide added convenience to the user. As an example, a cookie can be constructed so that a visitor to a subscription-based site doesn't need to go through the login process every site they visit the site.

For advertising-based sites, cookies are critical to measuring traffic and usage. If you ever wonder how a Web site without required registration is able to compute "unique visitors," the answer is via cookies. When a site user visits for the first time in during a reporting period, a cookie is placed on that user's computer that essentially says "don't count me again for the rest of the reporting period." If the user deletes that cookie, the same user is counted again, effectively inflating the unique visitor count.

When cookies represented a one-to-one relationship between publisher and site visitor, very few people found them objectionable. But when Web advertising networks introduced the concept of "third party cookies," things began to get ugly.

When an advertising network with say, 1,000 sites, places its cookie on a user's computer, it is then able to tell if that user visits any of its other 999 sites. Every time the user visits one of those sites, the network is able to capture this information, building a behavioral profile of the user. A number of years ago, one major ad network got a little too clever and started matching its behavioral profiles to online registration data, allowing it to know not only who you were, but your interests and Web surfing preferences as well. That hit a little too close to home, and the program was canceled after a storm of public protest. Behavioral profiles have again come back into fashion, the difference this time is that they are all anonymous. What upped the ante on cookies is when most of the popular anti-spyware software companies decided that these third-party cookies were invasive, and allowed users to delete them. Even though these software companies grudgingly admit that these cookies are generally not harmful and don't really invade anyone's privacy, they have an agenda of their own: it allows their software to "find more stuff" on user's computers, making their software seem more valuable.

It is possible to delete all the cookies on your computer using a feature built right into every browser. Trouble is, this deletes "good" cookies (those that speed login to specific sites by saving user name and password), as well as third-party cookies, which is why more Web-savvy users don't do it. It's also important to understand that most anti-spyware software selectively deletes cookies, trying to delete only third-party cookies. That means for most data publishers, the cookies set for subscribers with their passwords remain intact, and counts of unique visitors are not going to be distorted.

Those most loudly bemoaning the issue of cookie deletion are the advertising networks, which increasingly depend on the third party cookies they set to control ad rotation and target ads based on behavioral profiles. Some executives from the major ad networks are busy writing editorials suggesting that publishers must convince their audiences of the benefits of third party cookies. Correct me if I am wrong, but the only reason third party cookies need to be defended is because the slippery practices of some advertising networks have brought them into disrepute, to the point where legislation has even been proposed that could potentially outlaw cookies. But now publishers are being asked to run out and put their reputations on the line by endorsing cookies on behalf of this group of unregulated and often shadowy advertising networks. And since we're being asked to endorse third party cookies, and since networks can charge more for targeted advertising, is it not unreasonable to ask how much of that premium pricing trickles down to publishers?